10 Reasons Why Small Business Owners Fall For Scams

Scams have been around in various forms forever, but the internet has given these old tricks a new life. The digital age has made it easier for scammers to target more people, and small business owners are particularly vulnerable.

A Nationwide survey found that nearly one-quarter of small business owners were targeted by scams involving generative AI in 2023. In the UK, 72% of small businesses have encountered cybercriminals, with phishing scams accounting for a staggering 92% of the fraud attempts, and invoice scams being the most frequently reported.

But why are small business owners such easy targets? It’s not just about lack of time or resources—there are deeper, more human reasons at play.

Real-life story. "He said he needed to check things out and, bang, the money is gone."

Paul Fuller’s business lost nearly $1.2 million after his account manager trusted a scammer posing as "Mike" from the National Australia Bank (NAB). The scammer had detailed knowledge of the company’s recent transactions, making the call seem legitimate. "He knew who had been paid the day before in our normal weekly pay run, he knew everyone we paid and the amounts," Mr. Fuller said.

Claiming there were fraudulent activities, he convinced the account manager to provide access to the business bank accounts to check if everything was ok. Within minutes, the scammer drained $1.2 million. While NAB managed to recover $84,000, the rest is unrecoverable, leaving Fuller’s business under severe financial strain.

(Source: www.abc.net.au/news/)

Why Small Business Owners Are Easy Targets

1. Wearing Too Many Hats

Small business owners often handle everything themselves - from sales to HR to bookkeeping. With so much on their plate, it's easy to overlook security concerns. When you're rushing to meet a deadline or make a sale, you might not question an invoice from an unfamiliar vendor or a suspicious email claiming to be from a supplier.

Solution: Secure your business from the very beginning, so you check this box and then review from time to time the status. Here's how to do it:

2. A Trusting Nature

Entrepreneurs pride themselves on building strong relationships with customers, suppliers, and other businesses. This trust can sometimes backfire when scammers pose as familiar faces, tricking business owners into financial traps.

Solution: Always verify the identity of anyone asking for sensitive information. Call known contacts directly to confirm their requests and use tools to help you identify scams and phishing attempts.

3. Business Owners Are in a Hurry

Entrepreneurs are always short on time, and this is not a myth but a reality. They rarely have the luxury to carefully examine every email, invoice, or offer that comes their way. Scammers take advantage of this situation by sending fake invoices or requests for sensitive data, knowing that a busy business owner might skip important verification steps or overlook suspicious details.

Solution: Take time for important decisions. Set aside moments in your schedule to review financial transactions and email communications carefully. Even if you're in a hurry, pausing to double-check a request can save you from significant losses down the line.

4. Using Many New Apps Without Proper Security Setup

Many small business owners use different apps to assist with time management, accounting, communication, and other tasks. While these tools can improve efficiency, they also bring potential security risks. If they overlook setting up strong passwords or multi-factor authentication for these apps, or the apps themselves, have security vulnerabilities or experience breaches, sensitive business data is exposed.

Solution: Follow the best cybersecurity practices and regularly update your software to protect against vulnerabilities. Before adopting a new app, make sure to check for any security concerns. Also, consider using a digital identity monitoring tool to keep an eye on your business data and receive alerts if it appears online.

5. Lack of Cybersecurity Knowledge

Small business owners fall victim to scams because of their lack of knowledge or resources. If you don't understand how a scam works, it's difficult to protect yourself from it. Phishing emails, fake websites, and ransomware attacks can be devastating, and many small business owners are unfamiliar with these threats.

Solution: Cybersecurity tools that detect and stop attacks before they do damage don't have to be costly. Bitdefender Ultimate Small Business, for example, offers a range of affordable solutions designed to protect small businesses from fraud, phishing, and cyberattacks. (more about it at the end of the article).

6. Cash Flow Struggles

When operating with tight margins, cash flow issues are a constant concern. Scammers know that desperate business owners are more likely to take risks, especially when promised quick financial relief, such as fake loans, grants, or government assistance programs. These scams can seem like a lifeline during tough times.

Solution: Be skeptical of offers that seem too good to be true. Before applying for any loan or grant, ensure it's from a legitimate source. Verify government assistance programs by checking official websites or contacting government offices directly.

7. Desire to Grow Quickly

It's human to want to expand and grow, but be cautious when feeling pressured to take shortcuts or rush into decisions. Some people take advantage of this desire for success by promoting fake investment opportunities, marketing services, or business partnerships that claim to offer high returns with low risk.

Solution: Slow down and do your research. Be wary of unsolicited offers, especially if they require upfront payments. Consult trusted advisors, mentors, or fellow business owners before making big decisions.

8. Over-reliance on Emails

You cannot go back to not using email for communication with customers, suppliers, and partners. However, you can protect it as it is the main channel for phishing scams – emails that trick recipients into clicking malicious links, sharing passwords, or sending money.

Solution: Train yourself and your team to recognize phishing attempts and use email protection tools to filter out the scams.

9. Limited Access to Cybersecurity Support

You're lucky if you have a cybersecurity expert friend who can help you secure your business and offer advice on best practices. However, most very small business owners don't have one and may think that hiring a specialist is out of the question. This lack of support can make it harder to identify scams or know what to do when something feels off.

Solution: Get your own "advisor" as part of a protection suite for your business. Scam Pilot (a component of Bitdefender Ultimate Small Business Protection) not only identifies scams but also functions as an AI chatbot specialized in cybersecurity, allowing you can ask any questions about how to stay safe or what to do in a particular situation.

10. Scammers Are Using AI to Perfect Their Tactics

Today’s scammers use AI to craft compelling stories, making it impossible for business owners to differentiate between real offers and scams. In the past, grammar mistakes, poor designs, or clumsy imitations of official websites were red flags that could help you avoid disaster. However, with the use of AI, everything is now flawless.

"AI is being used in all facts of the scam. From a text message or email in perfect English (or any other language), photos of non-existent, but very cool, products, voice mails from family members asking to transfer money immediately to solve an urgent calamity, to deep fakes that convince both financial managers to transfer large sums of money, thinking their CEO just told them in a video call," declared Jorij Abraham, Director of GASA for Bitdefender.

Solution: Fight AI with AI. Use Scam Pilot to detect scams before they harm your business, giving you time to react and stay safe.

How to Prevent Falling for Scams

1. Educate Yourself and Your Team: Knowledge is your first line of defense. Keep up with the latest scam tactics and cybersecurity tips through resources like Bitdefender’s blog. We update it daily with the latest news, how-to's, and what to do in various scenarios.

2. Verify Requests for Payment or Information: Whether it's a suspicious invoice or an email from a "customer," always verify the source.

3. Use Strong Cybersecurity Measures: Protect your business with strong passwords, multi-factor authentication, and antivirus software. Regularly update your systems and educate your team on cybersecurity best practices.

4. Monitor Your Accounts: Keep a close eye on your business bank accounts, emails, and online services for any unusual activity. Set up alerts for large transactions or login attempts from unfamiliar devices.

5. Be Skeptical of Unsolicited Offers: If you receive an offer, award, or investment proposal out of the blue, especially one that requires an upfront payment or seems too good to be true, take the time to research it.

Protect your business with an easy and affordable solution

Bitdefender Ultimate Small Business Security is here to help you. Bitdefender experts have gathered in one package an easy-to-use, all-in-one, affordable solution that protects your business against all known threats.

Key features and benefits of Bitdefender Ultimate Small Business Security include:

● Powerful threat protection for the entire team - Each employee device is fully secured, along with company servers storing customer and other sensitive information. Additionally, online activities like email, web browsing, and social media use are shielded, and webmail accounts (Outlook and Gmail) are protected. It’s seamless coverage in the office or at home.

● Advanced Scam and Fraud Prevention - AI-powered protection trained around small business-specific scams keeps a watchful eye, proactively detecting and blocking phishing attempts, scams, malicious websites, and other shady online tactics before they reach your team.

● Centralized Management Made Simple—Manage security effortlessly across the entire workforce from a single place through an intuitive dashboard. The user-friendly controls make it easy for anyone to configure precisely what’s needed to monitor and manage.

● A solution that businesses can trust- Consistently reaching the top positions in industry tests for protection and performance.

Check out plans, here: https://www.bitdefender.com/small-business/